Korea’s cryptocurrency market continues to increase quickly, however coverage reform for digital asset has not stored tempo. Whereas world leaders like Coinbase are accelerating diversification and institutional engagement, Korea’s prime exchanges — Dunamu’s Upbit and Bithumb — stay confined by regulatory boundaries that restrict development. The business now stands at a essential juncture the place the absence of clear frameworks may undermine its world competitiveness.
Coinbase’s Document Quarter Highlights World Divergence
Within the third quarter of 2025, Coinbase, the most important U.S. crypto trade, posted its highest-ever earnings, recording a internet revenue of USD 432.6 million (KRW 620 billion) — a fivefold enhance year-on-year.
The efficiency surge got here not solely from better buying and selling exercise pushed by market volatility, but additionally from the growth of derivatives, institutional buying and selling, custody providers, and stablecoin merchandise.
Via acquisitions and enterprise diversification, Coinbase has established a number of development engines throughout futures markets, index derivatives, and digital funds, pushing its market capitalization to USD 89.1 billion (KRW 128 trillion) and tripling its share worth since 2023.
This reinforces the worldwide shift towards regulated, multi-service exchanges able to capturing institutional liquidity and long-term investor belief.
Korea’s Exchanges Present Development, However With Structural Limits
In the meantime, South Korea’s exchanges additionally benefited from 2025’s bullish digital asset cycle.
Based on information from The Block, the third-quarter buying and selling quantity of Dunamu’s Upbit reached USD 286.4 billion (KRW 411 trillion), greater than double the identical interval final yr. Bithumb noticed its quantity rise from USD 47 billion to USD 128.1 billion, signaling a powerful rebound in retail exercise.
Regardless of these positive factors, their development stays lower than half that of Coinbase’s. The distinction lies within the construction of their enterprise fashions:
Korean exchanges nonetheless rely totally on retail buying and selling charges, whereas world opponents have diversified into institutional providers, futures, and monetary merchandise that stabilize earnings even in unstable markets.
A Market Increasing Quicker Than Its Coverage Framework
Korea’s crypto exchanges as soon as ranked among the many largest globally, however regulatory inertia has slowed their evolution.
The absence of clear guidelines for company or institutional participation has restricted broader market growth. Following the current lifting of restrictions on digital asset funding companies, expectations had risen for a extra complete digital asset framework to observe.
Nevertheless, the Monetary Companies Fee (FSC) has but to ship the long-anticipated pointers on company digital asset buying and selling — initially slated for launch within the third quarter of 2025 — leaving listed firms and institutional traders hesitant to interact.
On the identical time, derivatives buying and selling, now a significant revenue engine for world exchanges, stays restricted in Korea. The federal government has but to determine a authorized foundation for crypto derivatives or ETFs, leading to what business insiders name a “shadow regulatory surroundings” the place exchanges face casual restrictions on product innovation.
Earlier this yr, Bithumb’s try and introduce leveraged merchandise was halted after regulatory intervention, signaling that even cautious innovation stays beneath scrutiny.
Trade Frustration Grows
Trade voices are more and more urging the federal government to modernize crypto coverage.
A senior trade govt famous:
“Coinbase and Binance turned world leaders via product growth and institutional entry, whereas Korean exchanges stay boxed in by incomplete rules. With out reform, we threat shedding our aggressive edge completely.”
One other business supply added:
“For Korea’s digital finance ecosystem to mature, we’d like clear frameworks for spot ETFs, institutional and international participation, and derivatives. In any other case, the market will keep depending on retail traders and short-term cycles.”
These issues echo throughout the sector, the place competitors amongst native exchanges has intensified amid stagnant coverage progress, squeezing profitability for all however the market chief.
Regulation because the Lacking Catalyst for Korea’s Digital Asset Market
Korea’s digital asset market stays vibrant however structurally imbalanced. The ecosystem is wealthy in retail exercise, liquidity, and technological adoption — but constrained by regulatory uncertainty that forestalls exchanges from scaling into world fintech gamers.
This imbalance is especially vital given Korea’s broader ambitions in digital finance, Web3, and tokenized belongings. The federal government’s gradual rollout of Digital Asset Consumer Safety Act provisions represents a step ahead, however lacks complementary measures for innovation-driven coverage, corresponding to sandbox packages for digital asset ETFs or regulated derivatives.
If unresolved, this hole may discourage international participation, drive capital outflows, and isolate Korea from the Asia-Pacific’s rising institutional crypto networks.
World Momentum for Korea’s Digital Asset Market Requires Coverage Braveness
The distinction between Coinbase’s report earnings and Korea’s constrained market displays a deeper coverage problem. Korea’s exchanges usually are not struggling due to poor expertise or lack of customers — they’re hitting a regulatory ceiling.
To stay related within the world digital asset financial system, Korea should transfer past reactive oversight and set up proactive, innovation-compatible regulation.
The subsequent part of development will rely not on buying and selling quantity, however on whether or not the federal government can align monetary stability and technological progress — enabling Korean exchanges to compete not simply inside Seoul, however throughout the worldwide digital finance panorama.
– Keep Forward in Korea’s Startup Scene –
Get real-time insights, funding updates, and coverage shifts shaping Korea’s innovation ecosystem.
➡️ Comply with KoreaTechDesk on LinkedIn, X (Twitter), Threads, Bluesky, Telegram, Fb, and WhatsApp Channel.
Elevate your perspective with NextTech Information, the place innovation meets perception.
Uncover the most recent breakthroughs, get unique updates, and join with a worldwide community of future-focused thinkers.
Unlock tomorrow’s tendencies in the present day: learn extra, subscribe to our e-newsletter, and change into a part of the NextTech neighborhood at NextTech-news.com
